4_Perez vs CA Case Digest.doc

Laidziii: Case Digest in Oblicon – A1 G.R. No. 107737 1999

October 1,

JUAN L. PEREZ vs. CA

(LARU: This is a Case Digest that I found in the net. I can’t find man gud the full case ani sa net ui. I’ll check the full case sa Library lang. For your reference lang ni.)

THE CASE: This is a petition for review on certiorari of the Decision of the CA affirming the decision of the RTC.

FACTS: Along with Maria Perez, Fructuosa Perez, Victoria Perez, Apolonio Lorenzo and Vicente Asuncion, petitioner Juan Perez is a usufructuary of a parcel of land popularly called the "Papaya Fishpond." Covered by Transfer Certificate of Title No. 8498 of the Registry of Deeds for the Province of Bulacan, the fishpond is located in Sto. Rosario, Hagonoy, Bulacan and has an area of around 110 hectares.

On June 5, 1975, the usufructuaries entered into a contract leasing the fishpond to Luis Keh for a period of five (5) years and renewable for another five (5) years by agreement of the parties, under the condition that for the first five-year period the annual rental would be P150,000.00 and for the next five years, P175,000.00. Paragraph 5 of the lease contract states that the lessee "cannot sublease" the fishpond "nor assign his rights to anyone." Private respondent Luis Crisostomo, who reached only the 5th grade, is a businessman engaged in the operation of fishponds. On September 20, 1977, while he was at his fishpond in Almazar, Hermosa, Bataan, his bosom friend named

Ming Cosim with Compensation petitioner Charlie Extinguishment of arrived Obligations: #4 Lee. The two persuaded private respondent to take over the operation of "Papaya Fishpond" as petitioner Lee and his partner, petitioner Luis Keh, were allegedly losing money in its operation.

Private respondent having acceded to the proposal, sometime in December of that year, he and petitioners Lee and Keh executed a written agreement denominated as "pakiao buwis" whereby private respondent would take possession of the "Papaya Fishpond" from January 6, 1978 to June 6, 1978 in consideration of the amount of P128,000.00 broken down as follows: P75,000.00 as rental, P50,000.00 for the value of milkfish in the fishpond and P3,000 for labor expenses. Private respondent paid the P75,000.00 to petitioner Keh at the house of petitioner Lee in Sta. Cruz, Hagonoy, Bulacan in the presence of Lee's wife, brother-in-law and other persons. He paid the balance to petitioner Lee sometime in February or March 1978 because he was uncertain as to the right of petitioners Keh and Lee to transfer possession over the fishpond to him. Private respondent made that payment only after he had received a copy of a written agreement dated January 9, 1978 whereby petitioner Keh ceded, conveyed and transferred all his "rights and interests" over the fishpond to petitioner Lee, "up to June 1985." From private respondent's point of view, that document assured him of continuous possession of the property for as long as he paid the agreed rentals of P150,000.00 until 1980 and P.175,000.00 until 1985. For the operation of the fishpond from June 1978 to May 1979, private respondent, accompanied by Ming Cosim and Ambrocio Cruz, paid the amount of P150,000.00 at the Malabon, Metro Manila office of petitioner Keh. Receipt was issued to him. Handwritten below that receipt but above the signature of petitioner Charlie Lee, are the following: "Rec'd from Luis Crisostomo sum of P154,000.00 for above payment.

Laidziii: Case Digest in Oblicon – A2 Private respondent incurred expenses for Extinguishment WON private respondent may #4 be of Obligations: Compensation repairs in and improvement of the fishpond considered a sublessee or a transferee of in the total amount of P486,562.65. the lease entitled to possess the fishpond However, sometime in June 1979, under the circumstances of the case petitioners Tansinsin and Juan Perez, in the company of men bearing armalites, went to the fishpond and presented private HELD: respondent with a letter dated June 7, 1979 showing that petitioner Luis Keh had In this case, the lifting of the restraining surrendered possession of the fishpond to order paved the way for the possession of the usufructuaries. the fishpond on the part of petitioners and/or their representatives pending the resolution of the main action for injunction. Because of the threat to deprive him of In other words, the main issue of whether earnings of around P700,000.00 that the or not private respondent may be 700,000 milkfish in the fishpond would considered a sublessee or a transferee of yield, and the refusal of petitioners Keh, the lease entitled to possess the fishpond Juan Perez and Lee to accept the rental for under the circumstances of the case had June 5, 1979 to June 6, 1980, private yet to be resolved when the restraining respondent filed on June 14, 1979 with the order was lifted. then CFI of Bulacan an action for injunction and damages. He prayed for the issuance of a restraining order enjoining therein Art. 1168 of the Civil Code provides that defendants Keh, Perez and Lee from when an obligation "consists in not doing entering the premises and taking and the obligor does what has been possession of the fishpond. He also prayed forbidden him, it shall also be undone at for actual damages of P50,000.00, moral his expense." The lease contract prohibited damages of P20,000.00, exemplary petitioner Luis Keh, as lessee, from damages in an amount that the court subleasing the fishpond. In entering into might award, and attorney's fees of the agreement for pakiao-buwis with P10,000.00. private respondent, not to mention the

That same day, June 14, 1979, the lower court granted the prayer for a restraining order. On November 13, 1979, Crisostomo paid one of the usufructuaries, Maria Perez (who died in 1984), the amount of P21,428.00 as her 1/7 share of the annual rental of the fishpond for 1979-80. Maria Perez issued a notarized receipt for that amount.

On January 11, 1980, the court lifted the restraining order thereby effectively depriving private respondent of possession over the fishpond. On February 14, 1980, the parties submitted a partial compromise agreement. ISSUE:

apparent artifice that was his written agreement with petitioner Lee on January 9, 1978, petitioner Keh did exactly what was prohibited of him under the contract — to sublease the fishpond to a third party.

That the agreement for pakiao-buwis was actually a sublease is borne out by the fact that private respondent paid petitioners Luis Keh and Juan Perez, through petitioner Tansinsin the amount of annual rental agreed upon in the lease contract between the usufructuaries and petitioner Keh. Petitioner Keh led private respondent to unwittingly incur expenses to improve the operation of the fishpond. By operation of law, therefore, petitioner Keh shall be liable to private respondent for the value of the improvements he had made in the fishpond or for P486,562.65 with interest of six percent (6%) per annum from the rendition of the decision of the trial court

Laidziii: Case Digest in Oblicon – A3 on

September

6,

1989.

35 Extinguishment of Obligations: Compensation #4

WHEREFORE, in light of the foregoing premises, the decision of the CA is AFFIRMED insofar as it

a) directs the release to private respondent of the amounts of P128,572.00 and P123,993.85 deposited with the Paluwagan ng Bayan Savings Bank in Paombong, Bulacan and

b) requires private respondent Crisostomo to pay petitioner Juan Perez the rental for the period June 1979 to January 1980 at the rate of P150,000.00 per annum less the amount of P21,428.00 already paid to usufructuary Maria Perez.

It should, however, be subject to the MODIFICATIONS that:

1. Petitioner Luis Keh shall pay private respondent Luis Crisostomo in the amount of P486,562.25 with legal interest from the rendition of the judgment in Civil Case No. 5610-M or on September 6, 1989, and 2. Petitioners be made liable jointly and severally liable for moral damages of P50,000.00, exemplary damages of P20,000 and attorney's fees of P10,000.00.